Paul Manafort paid $450,000 for landscaping and $10,000 for a karaoke machine, but nearly lost his health insurance because he couldn’t keep up with the payments, witnesses testified Thursday in the criminal trial of President Trump’s one-time campaign manager.

As the financial losses mounted, Mr. Manafort and his business protege Rick Gates spearheaded an effort to hide the dire situation by submitting several fake business income statements to banks, said bookkeeper Heather Washkuhn.

Prosecutors with special counsel Robert Mueller’s office called four witnesses as Mr. Manafort’s trial on bank and tax fraud entered its third day. The first two witnesses painted Mr. Manafort as a free-spender with a desire to flash his wealth.

For example, landscaper Michael Regolizio testified that Mr. Manafort built “one of the biggest ponds in the Hamptons” and a waterfall at his home in Bridgehampton, New York, racking up nearly half a million dollars in lawn-care fees between 2010 and 2014.

During part of that period, from 2012 to 2014, Mr. Manafort paid himself an annual salary of nearly $2 million, Ms. Washkuhn, his longtime bookkeeper, testified. But lobbying work in Ukraine — where Mr. Manafort earned nearly $60 million as a political consultant — dried up after his clients, including former President Viktor Yanukovych, were no longer in office. Mr. Manafort quickly became desperate for cash.

Mr. Manafort’s political consulting business, DMP International, lost more than $630,000 in 2015 and $1.1 million in 2016, Ms. Washkuhn testified. He struggled to pay his bills, including ones for Ms. Washkuhn’s company and his businesses’ health insurance.

DMP International wasn’t the only one hurt by Mr. Manafort’s reversal of fortune. Ms. Washkuhn talked about sending a series of increasingly desperate emails to Mr. Manafort demanding funds to pay his escalating personal expenses. At one point Mr. Manafort owed more than $1.1 million to pay off his credit cards and other expenses, according to financial documents presented in court.

“120K is urgently needed for your personal bills,” Ms. Washkuhn wrote to Mr. Manafort in a January 2016 email. Another email sent to Gates in April simply asked him to send money, “ASAP.”

In January 2016, Gates asked Ms. Washkuhn to draw funds from one of Mr. Manafort’s credit lines at Swiss Bank UBS. She told him that could not be done because the account was fully drawn.

Mr. Manafort’s financial struggles were happening at the same time he was running President Trump’s campaign without pay, according to an April article in The New York Times. Prosecutors so far have avoided talking about President Trump or the role Mr. Manafort played on his campaign.

Around the same time Mr. Manafort began losing money, phony business statements from DMP were submitted to local banks, prosecutors said. The statements were sent to Citizens Bank, Banc of California and Federal Savings Bank in 2016 and 2017. The statements were purportedly from Ms. Washkuhn’s company, but she noted multiple differences between the statement she created and the ones reviewed by the banks.

Chief among those differences were inflated income figures. The statement Ms. Washkuhn prepared for DMP showed the firm made about $400,000. But the statements sent to Banc of California said the company made nearly $4.5 million.

“There’s a lot of changes,” Ms. Washkuhn testified, comparing the two statements. “There’s about a $4 million difference.”

A statement sent to Citizens Bank claimed DMP made $1.7 million, but Ms. Washkuhn said the real statement showed a $638,000 loss.

And there were other discrepancies, she said. For example, the word “review” and the month of “September” and were spelled wrong and the font was different on the financial statement sent to Federal Savings Bank, where Mr. Manafort did obtain a loan.

Ms. Washkuhn also testified that some payments from Mr. Manafort’s overseas shell companies were disguised on DMP’s books as loans. Prosecutors have claimed Mr. Manafort used these companies to shield the income he earned in Ukraine from the IRS. Between 2012 and 2013, a total of $10.6 million flowed into DMP from overseas shell companies. Ms. Washkuhn said she didn’t recognize either company, but would have recorded them differently in the ledger if they came from Mr. Manafort.

Prosecutors indicated that some of these funds were needed because Mr. Manafort was using DMP to fund his personal lifestyle.

Thomas Zhenle, one of Mr. Manafort’s attorneys, tried to challenge that assertion during his cross-examination of Ms. Washkuhn, asking if Gates ever approved some of the payments made by DMP. Defense counsel on Tuesday said Gates, not Mr. Manafort, is the mastermind behind the financial fraud that the government has alleged.

Mr. Regolizo, the landscaper, and Joel Maxwell, who operates an audiovisual installation company, both testified about what appeared to be fraudulent invoices from their companies, adding another layer of mystery to the trial.

Mr. Maxwell insisted an invoice for $163,000 purportedly sent from his company was a fake. He said he never saw the bill before and noted its numerous errors, including an incorrect address and an assertion that his company was listed as an LLC when it is not. Mr. Regolizo told a similar story, saying two invoices presented by prosecutors didn’t include his company’s name, full address or logo.

Later in the day, accountant Phillip Ayliff, who prepared Mr. Manafort’s taxes, told prosecutors he was never told about foreign bank accounts. Mr. Ayliff would need to identify any foreign bank accounts on Mr. Manafort’s IRS forms to avoid under penalty of law.

Mr. Ayliff said he specifically asked the question, but Mr. Manafort responded, “no.”

Earlier in the day, prosecutors walked back their claim Wednesday that Gates may not testify.